Canadian Employment Change, Unemployment Rate

Canadian Unemployment Rate Actual 6.1%, Expected 6.2%, Previous 6.2%

Canadian Employment Change Actual -55.2K, Expected 5.0K, Previous -5.0K

Release Explanation: It measures the number of jobs created, or the percentage of employed/unemployed in the labor market. A currency will strengthen or weaken in-line with the other releases that the Employment Data impacts, rather than just as a one-off knee-jerk reaction to these numbers printing.

Trade Desk Thoughts: The miss was due in the most part to part-time workers leaving the labor market, -48k, and mainly from the construction and manufacturing sectors. There were gains in the food and services sector, but not enough to off-set the losses elsewhere. The pace of job growth has slowed in recent months, but is still in an uptrend, and the part-time labor market is still at +3.5% on the year, compared to the 0.9% full-time growth numbers. The Average Hourly earnings are running at 4.0% for the year, and importantly well ahead of the CPI inflationary read of 3.1%. The headline is a shock, but on further inspection the number is not as dramatic as it may initially seem.

The Canadian unemployment rate is in a steep decline, from 7.0% in 2005, to 6.1% now, and that may be the more balanced view to take on this. The rate was released better than expected, 6.1% versus analyst estimations of 6.2%, but since the end of 2007 the rate of reduction in the unemployment sector had slowed.

Forex Technical Reaction: At the time of the release, the Canadian dollar strengthened 20 pips. Just before the release the pair broken TheLFB S3, gaining almost 160 pips since the new trading day began. The pair is trading at the highest level now for almost one year.

The LFB-Forex.com